Medicare Part D Coverage Gap (“Donut Hole”)

Medicare Part D plans have a Coverage Gap, which is a temporary limit on what your drug plan will pay for prescription drug costs. If you do not receive a subsidy such as Extra Help from Medicare, or aren’t enrolled in a plan that offers additional Gap coverage, the combined amount you and your Part D plan spend on your Medicare Part D costs (not including premiums), determines if and when you will reach the Gap. For 2016, that combined amount is $3,310.

While in the Gap, you will pay 58% of the cost for generic drugs, and 45% of the plan’s cost for brand drugs in 2016. You leave the Gap when you spend a total of $4,850 in 2016. You then enter the ‘Catastrophic Coverage’ stage, where the cost of your prescriptions is usually lower.